Blockbuster Goes Into Price War Mode

from the dominoes-falling dept

Considering that part of both Blockbuster's and Wal-Mart's strategies against Netflix included providing service at a lower price, hearing that Netflix was dropping prices means that they need to do the same. Blockbuster has now said that they, too, will cut the price of their service to remain competitive with Netflix. Of course, this move might be targeted just as much at the entrance of Amazon as well. Of course, price wars, by themselves, may be good for customers, but can be disastrous for the companies involved. It should be interesting to see what kinds of more compelling services and applications the various companies come up with to convince people that their service is worth some sort of premium. We've already seen Netflix's plans to team up with TiVo. How long until Blockbuster counters? Relying on their brand name and the ability to drop off at a local store only gets them so far.

Ah... competition

All I care about is that after raising the price 10% earlier this year without much notice, NetFlix is now feeling the need to lower prices due to competitive pressures. Keep any one player from getting too big and powerful(cough Wal*Mart, Microsoft cough), and prevent/stop collusion (** gasoline industry **), and competition works quite well indeed.